Power Grid FPO is going to open on the 9th November, and close on the 12th November for retail participants. As I wrote earlier, the company did extremely well on listing last time around, so a lot of people must be watching it with keen anticipation. As I was reading through the prospectus – I thought I’d do this post with just some of the key numbers that grabbed my attention.
This Navratna transmitted approximately 363.72 billion units of electricity, representing approximately 47% of all the power generated in India in Fiscal 2010, and was ranked as the world’s third largest transmission utility by World Bank in 2009. Power Grid is the only listed power transmission company in India, and has a lot of activity going on with 68 power transmission projects at various stages of implementation. They spent Rs. 291.2 billion towards investment in transmission projects during the government’s 11th Five Year Plan, so you can see that we are talking about huge numbers here.
The tariffs for the transmission projects are determined by the Central Electricity Regulatory Commission and are based on a cost plus tariff based system and provide a return on equity of 15.5% on pre – tax basis.
They have generated massive positive cash from operations in the past, and their profits have been on the rise as well. The EPS was Rs. 4.85 in 2010, and Rs. 3.22 for the six months ended this fiscal. The year has been good for Power Grid as the PAT was up 41.62% at Rs. 4.59 billion for the September 2010 quarter.
While the company primarily generates its revenues from power transmission – they do some consulting work for other companies, and are also present in the Telecom sector.
The Power Grid FPO pricing has not been declared yet, and I will update this post as soon as the pricing details are out.